https://mishtalk.com/economics/tennants-unions-demand-biden-… The Washington Post reports Soaring Rent prices Have Advocates Calling on White House to Intervene. Rental costs in the US are soaring at the fastest pace in more than three decades, surpassing a median of $2,000 a month for the first time ever and pushing rents above pre-pandemic levels in most major cities.
Nationwide rents rose 14% in May. A friend of mine got a notice of a 25% rent bump.
I expect we will be seeing many more homeless people now.
It doesn’t help landlords to have empty apartments. At some point they will have to reach an equilibrium with people’s ability to pay.
Question: are there a lot of empty apartments? It doesn’t seem so.
https://ipropertymanagement.com/research/rental-vacancy-rate…
The national rental vacancy rate is 5.8%…The national average rental vacancy rate for 2021 was 6.1%…31.5% of vacant rentals are available for rent; the rest are held off market or are otherwise unavailable…The national rental vacancy rate has declined steadily and significantly over the last decade or so.
Question: are there a lot of empty apartments? It doesn’t seem so.
All types of realistically priced housing has been underbuilt for some decades now. The shortage will take decades to fix. I do not expect it to happen because the builders will not build relatively low-margin homes in volume. There is not enough profit in it–and a lot of risk. The buyers with cash (i.e. not owner-occupants but companies buying houses to rent them out) will be in the market for a long time.
It’s never in a landlord’s interest to have a vacancy.
As long as it’s a good tenant. I kept our rental vacant rather than renting to a tenant who was questionable for affording the rental. Eviction is an expensive procedure.
What you have to do is determine how many months of vacancy and zero income will eliminate your rent hike on an annual basis. Turnovers are expensive too. We always kept our property top notch and rented to the lower end of comparable property rents, requiring a higher credit score than those same comps. Never had a vacancy or a problem.
IP,
who exited the rental business this year with a crazy profitable sale
It’s never in a landlord’s interest to have a vacancy.
—Peter
But is there a price sweet spot?
For example-a 100 apartment complex charging $600/month with 5% vacancy. They rise the rent by $200/month to $800/month. Does the vacancy rate goes to 30%? Perhaps it only goes to 20%. Then the landlord has raised his revenue stream and has less maintenance calls to respond.
My friend who was paying $600/month now has received a 30 day notice that the rent will be $800/month in the future.
It’s never in a landlord’s interest to have a vacancy.
As long as it’s a good tenant. I kept our rental vacant rather than renting to a tenant who was questionable for affording the rental. Eviction is an expensive procedure.
Some tenants are destructive. Such a tenant can easily cause damage exceeding the deposit. I have experience working as an apartment maintenance man while going to university. And seen some nasty damaged apartments that had been vacated. And taking poor people to small claims court is an exercise in futility.
Tenant selection is all in the residence rental business.
New York City landlords are clawing back the deep discounts required to get someone to rent an apartment in the city during the height of COVID in 2020.